Goodwill

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The Economic Times  Apr 28  Comment 
Natural resources conglomerate Vedanta Ltd reported a fourth-quarter adjusted loss of Rs 11,181.26 crore, hurt by a non-cash charge of Rs 12,304 crore.
The Economic Times  Apr 25  Comment 
The company had reported a net loss of Rs 240.82 crore in the corresponding period a year ago. Following the development, the stock sank 5.11 per cent to hit a low of Rs 146.65 on BSE.
Motley Fool  Apr 21  Comment 
These Fools read between the lines to tease out the less-than-stellar truth behind Constellation Brands’ seemingly impressive quarter.
Reuters  Feb 29  Comment 
Yahoo Inc said it may have to write down the goodwill value of Tumblr, more than two years after the web pioneer spent $1.1 billion to buy the microblogging site.
Times Online  Jan 28  Comment 
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Forbes  Dec 11  Comment 
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newratings.com  Dec 9  Comment 
Klöckner & Co SE impairs Goodwill Klöckner & Co. SE / Key word(s): Miscellaneous 09.12.2015 18:48 Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted by DGAP - a service of EQS Group AG. The issuer is solely...
Forbes  Dec 1  Comment 
Ship Goodwill donations for free from home? Yes please.




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Goodwill is the premium paid by an acquiring company over and above the acquired company's tangible book value. On a company's balance sheet, goodwill represents the sum of all the premiums the company has paid for all of its acquisitions (although occasionally goodwill from past acquisitions whose value has fallen is written down).

Because tangible book value is equivalent to the replacement cost of a company - IE, what it would cost to buy all the company's properties, buildings, factories, and machines, hire all its workers, etc. - you might think an acquiring company would never pay more than tangible book value. After all, the acquiring company could simply build the acquisition target company from scratch for the price of its tangible book value.

However, most companies have intangible assets - such as relationships with key customers, patents and trademarks, the unique character of its employees, which are not so easily replaced. So, acquiring companies frequently pay more for a company than its tangible book value.

The acquiring company must carry the premium it pays for its acquisition targets above tangible book value as "goodwill".

Goodwill is an intangible asset arising from an acquisition, but not all intangible assets are goodwill - only those a company owns as a result of purchasing other companies. It should be noted that because Goodwill is technically an intangible asset, companies will occasionally lump the two together on the balance sheet, typically as "Goodwill and Intangibles".

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